JOURNALOF
Economic Behavior
Journal of Economic Behavior and Organization & 0 ~ll~
ELSEVIER Vol. 29 (1996) 323-329
Changing a decision taken under incomplete
information during the process of execution
Gil S. Epstein *
Department of Ectmomics. Bar.llan University. Ramat Gan 52900. Israel.
Received 10 January 1994; revised 27 September 1994
Abstract
When making decisions in a situation of uncertainty such as investments, R and D,
pricing etc., there is always the possibility of choosing the wrong action. This study deals
with a case where decisions are made under uncertain conditions. While implementing the
decision, we may receive information about the unknown and update our expectations.
Changing the decision while carrying it out is costly. In this study we show that there are
sufficient conditions, at the time of making the first decision, to realize that one will never
want to change it. Some of these conditions depend only on the distribution of the random
variable and do not depend on the cost function.
JEL classification: D4; L I; L2
Keywords: Uncertainty; Decisions; Information
1. Introduction
Scarcity implies that choices must be made, and making choices implies the
existence of costs. Every time a choice must be made, opportunity costs are
incurred. Making decisions is not always an easy task and yet, we make decisions
" Corresponding author.
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